By Matt Stoller, a fellow at the Roosevelt Institute. His Twitter feed is http://www.twitter.com/matthewstoller. Cross posted from New Deal 2.0

If NFL fans are demanding negotiations be opened up, why are homeowners kept in the dark?

Zach Carter wrote a good piece on homeowners’ demands of the big banks. National People’s Action has coordinated thousands of homeowners in asking for an aggressive settlement with the banks on their handling of foreclosures. Iowa Democratic Attorney General Tom Miller, who is heading the 50-state investigation, is one of their prime targets.

But it’s this video that makes it interesting.

Here’s the transcript, starting at around :53 into it.

Iowa citizen Mike McCarthy: How close are we to a settlement? And with the settlement, will we have mandatory modifications? Will we have mandatory principal reductions? Will we have restitution for families who were fraudulently kicked out of their home? And also we want to see that these bank officials who were responsible for committing mortgage or foreclosure fraud brought up on criminal charges. I’m gonna ask you again, like I did on December 14. Are we gonna put some people in jail?

Iowa Attorney General Tom Miller: We’re really getting close to negotiations. I’m not gonna talk about, I really feel I shouldn’t talk about what’s gonna be in the agreement, what’s not gonna be in the agreement. That’s something we have to hammer out with the Justice Department, and the Federal people, and the banks in a negotiating session. So in terms of talking to you or to the press, we’re pulling back on specific details.

Look at what he’s saying. Miller has decided that he will keep the public in the dark about the negotiations over how banks will deal with the homeowners they hurt. They can’t know when decisions will be made. They can’t know if they will have principal reduced. They can’t know if they will get loan modifications. They can’t know if they will get restitution if they’ve been illegally kicked out of their homes. Miller will not even speak to criminal prosecutions of bankers over mortgage fraud because he is still negotiating with the criminals over whether to bring charges.

The backstory here is that Miller had exuberantly vowed jail time for bankers to Iowa citizens, before backtracking on his commitment. This level of deception by high officials is now routine when it comes to cracking down on lawbreaking by big banks.

It’s not obvious to me why Miller backtracked. I don’t think he ever had any intention of charging any bankers with any criminal charges, that’s just not how law enforcement works these days. My guess is that he didn’t realize that his initial promise to Iowa voters would be taken seriously, and then it blew up in the press. So he decided to stop talking and do the negotiating in secret.

This is not reasonable. If the NFL is being asked to open its books and NFL fans are asking that the negotiations between the players and owners take place in the open, surely the talks over foreclosure fraud can be done with some ability for the public to know what is happening.

Tom Miller may not realize that keeping homeowner victims in the dark while negotiating with the perpetrators is the wrong way to approach criminal activities. But the rest of us do.

41 comments

I am not trying to sound like a broken record and am really starting to wonder where the TCTP or Too Criminal To Prosecute acronym came from but it just seems to grow into itself as a short description of this situation like TBTF did in the past.

Do the creation of acronyms like this automatically confer absolution on the covered parties? It seems to have worked for TBTF.

I also don’t want to sound like a broken record, but the record of events leaves me no choice.

I wish this citizens’ group well, but at the same time I’m telling them and everyone else that if you trust elites to do anything for you, they’re going to stab you in the back. That’s the only thing they know how to do, the only thing they want to do, and the only thing they will ever do.

So I hope people will start asking themselves, each time one of these shams falls through (e.g. the sham finance bill, the health racket bailout, the fed audit, the FCIC, this bogus “50 state investigation”), “How long am I going to keep believing in a system which proves every time it’s nothing but a criminal fraud?”

Representative pseudo-democracy is a proven failure and a proven scam. You dream of “better elites”? You’re not going to get them.

Direct, truly participatory democracy is the only form left which is not a proven failure.

So the fact is that when we hear something like, “Democracy is the worst form of government except for all the others”, or “Americans can be trusted to do the right thing after they’ve tried everything else”, government by pseudo-representative elites is among those “all the others”, the “everything else”, which belongs on history’s trash heap.

“Direct, truly participatory democracy is the only form left which is not a proven failure.”

Sorry, it problems too.

Direct democracy was invented in ancient Athens and it had problems even then.

It seems that there was a gentleman by the name of Alcibiades who convinced the Athenians that a war of conquest against Sicily was a wonderful idea and kicked off the Peloponnesian war, a disaster for Athens.

Athenian democracy was only a partial model. While it was politically far more direct, it was not an economic democracy, and indeed citizenship was restricted to property-holders. It was also an aggressive, exploitative empire. It was a slave society as well.

So under those circumstances, it would be easy for a rich demogogue like Alcibiades to sway the democracy. That’s because the system combined the worst weakness of direct democracy (the possibility of mob rule) with the worst elements of property and imperialism.

So while in its political form it offers a possible model (but we would need a more universal measure of citizenship, and dump the imperial concept), that’s the only formal way we can look to it as an ancestor.

BTW, to clarify the chronology. The Sicilian expedition came about halfway through the c. 30 year Peloponnesian War. It actually represented a resumption of hostilities after several years of a tenuous truce which Alcibiades kept trying to break and cause to flare back up into war.

I point that out not to nitpick, but to reinforce my point that it wasn’t a reckless rogue like Alcibiades, manipulating the fickle democracy, who caused the war in the first place.

On the contrary, war was the well-deliberated policy of the responsible statesman Pericles, and was carefully premeditated by the aristocratic establishment. The reason was to defend and aggrandize the empire. IOW, the reason for the war was systemic and inherent to imperialism. It had nothing to do with democracy. Demagogues were a later development, preying upon first the greed and then the desperation of Athens, as its fortunes waxed and then waned. But they never caused the war.

To be really nit-picky, one did not have to be a property-owner to have full citizenship in Athens, at least not during the fifth century. But it’s true that politics was dominated by the aristocracy, even if aristocrats such as Pericles had to manage the affairs of the Citizens’ Assembly to make the votes come out right.
What was really insidious about Athenian imperialism was the way in which the common people were given just enough of a stake in it to support imperialistic policies. This explains the enthusiastic response to Alcibiades (another aristocrat) and his proposed expedition to Syracuse.

Your comment is silly and childish. No one expects any form of government to be perfect, and as attempter clarifies, the same “elites” who run things so swimmingly in the great old US of A ran things in Athens as well. Let the people who actually have to fight and die in, and pay for, wars decide whether to engage in them. That alone will be a revolutionary innovation to marvel any achievement in human history. No more wars? Perhaps not. But I’ll take my chances.

The title of this piece seems to me to be very misleading. Where is the evidence that there are negotiations taking place “to put Bankers in jail”? Is Matt Stoller trying to say that this option is even on the table? Most people with a firm grasp on power politics in America doubt it. After all, the politicians work for the bankers, and subordinates do not usually issue threats to their superiors.

While there is no question that some negotiations are taking place; I am quite sure that the question of hard time for Bankers is not at all being discussed. What would be on the top of the agenda is brainstorming ideas on how the politicians will eventually sell to the public whatever banker-friendly deal is ultimately reached.

Close to negotiations? How close? Are we discussing the shape of the table yet?

Tom Miller’s hasty, panicked retreat from his false bravado means only one thing. “Negotiation” with the imperial Ministry of Justice are entirely one way: will the details of his private life will be featured on CNN — or will he be Iowa’s next compliant governor on track for higher office within the kleptocracy.

Meanwhile Americans may be getting some ideas from street justice sweeping across the colonies and from the uppity natives down on the heroin plantations of Afghanistan. Apparently, America’s leaders seek glorious martyrdom like Ka-Daffy.

Why the hell would he bring the Fed’s into this? Interstate fraud? They violated the laws of Iowa, not Washington DC. Maybe he needs extradition? He should be kicked in the crotch to see if he has any.

Even talking about prosecuting the perps is more than anyone at the federal level has done, as I understand.

I don’t know anything about Miller, but it’s possible that initially he really did intend to prosecute, but didn’t have any idea how powerful the forces opposing him (banks, feds, courts, and others in Iowa government) really were.

This country has stopped being a democracy in 2000 when the Supreme Court sided with its political affinity rather than with the facts. Bush then handed the country fully and totally to a group of oligarchs. Of course, the process started with Reagan 20 years earlier. Unless we take to the streets, stop paying taxes and disobey authorities, we will not take the country back let alone put financial criminals in jail.

Any talk about financial justice amounts to wasting time howling at the moon. When the Republican vote will be only 1/3 of the voting public, Democrats return to their roots, i.e. FDR, and people such as Obama will at best be state representatives, we will talk jail, larger unions and less inequality.

It took ten years and an entire generation in the streets just to stop the Viet Nam war. It will take another ten and another generation with the guts to protest en masse every day to take down disaster capitalism. Dig you guys really think one reformed banker with a blog was going to do it?

I was involved in the Viet Nam war protests as were many of my cohorts and believe the protests by students and other youth led to the end of the war. I am encouraged by youth at the Wisconsin protests but their doesn’t seem to be any youth protests against elites and banksters. I am hopeful that the N. African and middle east protests will somehow inspire more youth protest against disaster capitalism.

Given that our involvement in Vietnam really dates at least as far back as our funding the French during the latter stages of the French-Indochinese war, it really took a lot longer than 10 years (unfortunately).

The most frustrating part of this is that the day-to-day fraud occurred on the state level in the original mortgae originations, lack of county record filing, and “mistakes” in foreclosure documentation.

The state AGs should be able to line up busloads of low-level and mid-level perps dying to cut deals to exchange their higher-ups for leniency. The state AGs could hand the Feds the heads of many executives on silver platters with large financial settlements for their beleagured state and local budgets as garnish on the side.

It appears that it will soon be left to the county attorneys to represent the country in this issue as they figure out that they can collect a lot of missing filing fees.

Mr. Miller was purchased. Negotiating secretly with the banks is evidence of a crime. Not the first, not his last. If you have tried to get answers from his agency, you may find even his own personnel are sick of his act. I spoke to people in his department, they know the whitewash is on.

So you are saying that it wasn’t a call from Obama that got him to change his mind, but just his standard corrupt way he does things? And NEGOTIATE with the banks? What is this, a hostage situation? What ever happened with just enforcing the law, charging people with a crime and prosecuting them? Or is he tied up prosecuting some other banks we don’t know about, say in another galaxy?

The bitter thing for me, libertarian that I am (or was) is that the capitalist line is that all gov should do is enforce laws like this, no matter the short term damage. The “market” will always bounce back, and even more, it will bounce back best when fraud is punished. But apparently capitalism is just another political philosophy for the criminal class to game just like socialism. Same people, three piece suit instead of an olive drab outfit with a red star on the cap.

Will someone please tell me about a politcal system that is consistent with human nature and can be gamed less than others? I assume everything gets corrupted with time but there must be one which lasts the best. Maybe it was ours after all?

Capitalism has always been a Ponzi scheme – it requires “growth”; and has been for most of its history been gamed to the advantage of the rentier class. It blows up as a natural consequence of its pyramidal schemmatics, unless it is highly regulated, primarily with steeply progressive taxes on incomes, which are the only way govts have found to successfully regulate greed and provide redistribution sufficient to make markets function. Plus, aggressively prosecuting fraud to try to make the system somewhat less criminal. The syndacalist/anarchic models have some promise of being better systems, but how to get there from here remains a complete mystery.

I have thought about you are wishing for the last several years. I believe the best that can be done is to mitigate losses now and in the short term. When revolution does come or appears imminent, large scale
military misadventures will escalate further to the point of world war. Russia and China are wild cards but one or more nations will betray each other

Iowa citizen Mike McCarthy: How close are we to a settlement? And…..I’m gonna ask you again, like I did on December 14. Are we gonna put some people in jail?

Iowa AG Tom Miller: [after taking a truth serum] No comment thanks to Obie, Timmy G and some megabucks now in my name at Julius Baer, in the Caymans.

But here’s what I can truthfully tell you folks: “I believe in taking care of myself and a balanced diet and rigorous exercise routine. In the morning if my face is a little puffy I’ll put on an ice pack while doing stomach crunches. I can do 1000 now. After I remove the ice pack I use a deep pore cleanser lotion. In the shower I use a water activated gel cleanser, then a honey almond body scrub, and on the face an exfoliating gel scrub. Then I apply an herb-mint facial mask which I leave on for 10 minutes while I prepare the rest of my routine. I always use an after shave lotion with little or no alcohol, because alcohol dries your face out and makes you look older. Then moisturizer, then an anti-aging eye balm followed by a final moisturizing protective lotion.”

OTOH:
— rob thousands of homeowners, get a slap on the wrist.
— offer ‘teaser rates’ and home loans full of tricks and traps, keep all your money, keep your house, and get a slap on the wrist and no legal record of it.
— offer loans that are so imprudent that people end up foreclosed with permanent credit record problems, have nowhere to live, if they have kids the kids lose their school and friends, but you get to keep your goodies and (at the worst) pay a fine or get a legal slap on the wrist.

I could go on and on, but I’m too furious.

As a person who has **for years** striven to maintain good credit, then had a problem getting credit after the banksters screwed up the system in 2008, after watching this mess develop in the GWBush years — when the federal government didn’t even fund FBI white collar investigators despite warnings about massive mortgage fraud, I am furious.

What Miller is telling me is this: the so-called justice system is owned by the mafia, the banksters, and the hedge funds. Forget trying to be a good business person; you won’t stand a chance up against forgers, fraudsters, and criminal gangs who now go to law school, wear three-piece suits, own very nice boats, and fly on private jets.

Forget ‘capitalism’, unless it is of the crony variety.
Because we no longer have the judicial, investigative, and legal infrastructure to actually support real capitalism.

I have been a volunteer researcher for my state AG throughout this investigation.

I hear articles like this and I start freaking out because after all I have witnessed in our land records, if someone (and I mean a lot of someone’s) doesn’t go to jail for commencing with all this fraud, I have an idea what my response will be, but I don’t think our government will like it.

I continue to question the gentleman I am working with in my AG’s office, that they have not “sold out,” they have not “been bought,” and that all my work to expose this will come to some just compensation for the homeowners. I have conveyed that if these investigations are concluded and NO ONE goes to jail, including CEOs, the homeowners response will be swift and quite unexpected, but that the government will not like the response to it.

So, I’m pretty sure they know the public sentiment out here.

Pretty sure they know that either they punish these criminal banking enterprises correctly, or there will be a reponse like Egypt.

There will be no response from homeowners like egypt. Most people don’t even know how corrupt the system is and that the banksters and fraudsters creating cds and mbs have caused the meltdown. Majority of people still think it was a few foreclosures by people who should not have bought their house that caused the problem.

other thoughts on democracy…..their is no way for a political system to really last when politicians are allowed to stay in office for extended periods of time and are allowed to become work for some lobby after their terms.
Politicians seek power and re election, and money, not necessarily in that order. Obama has made it clear his idea of doing what is right for the people is to chum up with the richest people in the country and hire banksters for his adminstration.

Congress is a complete Joke as is the presidency. The banksters are setting policy and beeotch slapping congress and the american people. Mone and power are what politicians are after so it is highly unlikely one of them will have the stones to stand up to the banks.

However AZ did pass a great new law that was written by the state senator who had her own run in with the bank.

No doubt the american homeowers are getting screwed and they are being left to take the losses the banks have been paid for already. OUR POLITICIANS continue to fail us as citizens and they are doing everything to help the banks make record profits and increase salaries. AZ is the first state government to shown they are for the people but it took a run in with the inept servicers for it to happen.

It’s obvious by now that the depths of criminal fraud committed in the mortgage/foreclosure rip-off is so profound that TPTB can’t permit any revelations ever to surface for fear of a ‘Tunisia event’. Such revealed truths would totally destroy any residual faith in ‘the system’ still held by any segment of the American populace. It would become immediately obvious to everyone that the government is entirely in bed with the financial and corporate elite, and actively colluding with their every transaction designed to strip us down to the bone.

The only analogy I can see is the stripping of the Jews before being led into the gas chambers. Have the elite decided that the ‘little people’ will soon no longer be needing our jobs, shelter, healthcare, or savings, and that they may as well take all of our assets while they are still tangible, before we all are herded over the cliff into the abyss of global collapse? Are the elite preparing their lifeboat plantations in environmentally unspoiled areas, such as atop an aquifer in Paraguay? Storing seeds at Svalbard, to be planted after the Terminator technology has been activated, causing massive famine, and then the GM seed lines terminated, to ensure unspoiled future crops for the survivors?

Susan George thought the elite would be more subtle than this when she wrote The Lugano Report.
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The banks won’t, indeed can’t, tell anyone who owns their mortgage because no one does. The banks merely take the borrowers’ payments and eventually foreclose when it suits them. The banks pass around the right to collect the payments among themselves, but don’t seem to care about actually ‘owning’ the notes at any time. They only pretend to own the notes and mortgages when it comes time to foreclose, at which point they fabricate the documents which purport to prove their ownership, for the sole purpose of prevailing in court. They also seem to be fabricating the payment histories as described by Gretchen Morgenson in’ Waiting Seven Years for Two Answers’.

I think the system is broken and beyond repair. Each decade the impairment increases. Each decade the numbers get bigger. Was there a time when rule of law actually meant for everybody? No, just more or less exceptions. The exceptions are now so numerous that actual justice is now the exception that proves the rule of corrupt system. The laws regarding property, the homes we live and raise our families, have been tediously worked out over centuries. These are now being disregarded for the big banks. I rest my case.